AGREEMENT AND PLAN OF MERGER
BY AND AMONG
VOICEFLASH NETWORKS, INC., a Florida corporation
AND
VFNX, INC., a Florida corporation
AND
UNITED CAPTURDYNE, INC., a Florida corporation
AND
MAX XXXXXXX XXXXXX, XX
OCTOBER 8, 2001
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of October 8th,
2001, by and among VoiceFlash Networks, Inc., a Florida corporation ("VFNX"),
VFNX, Inc., a Florida corporation and wholly-owned subsidiary of VFNX
("Acquisition Sub"), United Capturdyne Technologies, Inc., a Florida corporation
("UCT") and Max Xxxxxxx Xxxxxx, XX ("Korbin") as majority shareholder. The
corporate parties hereto are sometimes hereinafter referred to collectively as
the "Companies," or individually as a "Company."
WHEREAS, the Companies participate in similar industries, use similar
technologies, perform similar research and development activities with respect
to software applications and have overall synergistic components; therefore the
respective Boards of Directors have determined that the combination of the
Companies is consistent with and in furtherance of the long-term business
strategy of the companies.
WHEREAS, the respective Boards of Directors of the Companies deem it
advisable and in the best interests of their respective stockholders that
Acquisition Sub be merged with and into UCT and UCT become a wholly-owned
subsidiary of VFNX and, in furtherance thereof, the Boards of Directors and
Shareholders of the Companies have approved, as applicable, the merger of
Acquisition Sub with and into UCT, upon the terms and subject to the conditions
set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties hereto agree as follows:
Article I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.2 hereof), Acquisition Sub shall
be merged (the "Merger") with and into UCT, with UCT being the surviving
corporation in the Merger (the "Surviving Corporation") and the separate
existence of Acquisition Sub shall thereupon cease. The Merger shall have the
effects set forth in Section 607.1106 of the Florida Business Corporation Act
(the "FBCA").
1.2 Effective Time of the Merger. The Merger shall become effective
(the "Effective Time") upon the completion of the filing of properly executed
Articles of Merger with the Secretary of State of the State of Florida, which
filing shall be made on the Closing Date after satisfaction of the conditions
set forth in Section VIII.
Article II
VFNX AND THE SURVIVING CORPORATION
2.1 Articles of Incorporation and Bylaws of the Surviving Corporation.
The Articles of Incorporation and Bylaws of Acquisition Sub shall be the
Articles of Incorporation of the Surviving Corporation (with the name of UCT
being substituted for that of Acquisition Sub).
2.2 Directors and Officers of the Surviving Corporation
(a) The directors of Acquisition Sub at the Effective Time
shall be the initial directors of the Surviving Corporation of the Merger and
shall hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the Articles
of Incorporation and Bylaws of the Surviving Corporation, or as otherwise
provided by law.
(b) The officers of Acquisition Sub at the Effective Time
shall be the initial officers of the Surviving Corporation of the Merger and
shall hold office from the Effective Time until removed or until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
Article III
CONVERSION OF SHARES
3.1 Exchange Ratio. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof:
(a) The shares of common stock of UCT ("Shares") issued and
outstanding immediately prior to the Effective Time, shall be converted at the
Effective Time into the right to receive an aggregate of 1,200,000 shares of
VFNX restricted Common Stock, par value $.001 per share. ("VFNX Shares").
(b) At the Effective Time, all Shares of UCT shall no longer
be outstanding and shall automatically be canceled and retired and shall cease
to exist, and each certificate previously representing any such Shares shall
thereafter represent the VFNX Shares, into which such Shares of UCT have been
converted. Certificates representing Shares of UCT shall be exchanged for
certificates representing whole VFNX Shares.
(c) If, prior to the Effective Time, VFNX should split or
combine the VFNX Shares, or pay a stock dividend or other stock distribution in
VFNX Shares, then the UCT Exchange Ratio shall be appropriately adjusted to
reflect such split, combination, dividend, or other distribution.
(d) Each Share of UCT held in treasury and each such Share
held by VFNX or any subsidiary of VFNX immediately prior to the Effective Time
shall be canceled and retired and cease to exist, and no VFNX Shares shall be
issued in exchange therefor.
(e) Each share of common stock of Acquisition Sub issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and exchangeable for one share of common stock of the Surviving Corporation
of the Merger.
3.2 Exchange of Shares
(a) No later than the Effective Time, VFNX shall make
available, and each holder of Shares shall be entitled to receive, upon
surrender to VFNX of one or more certificates representing such Shares for
cancellation, certificates representing the number of VFNX Shares and cash into
which such Shares are converted in the Merger. The VFNX Shares into which the
Shares shall be converted in the Merger shall be deemed to have been issued at
the Effective Time. The VFNX Shares to be issued shall be restricted under
Federal and state securities laws and shall contain a restrictive legend as set
forth below of Schedule 3.2 attached hereto.
3.3 Stock Options, Warrants, Debentures and Other Agreements. As of the
Effective Time, any stock options, warrants, convertible securities or other
contractual commitments or agreements of any kind to purchase or issue Shares
that are outstanding both as of the date hereof and at the Effective Time
(whether or not contingent or otherwise requiring further shareholder approval)
shall terminate as of the Effective Time, and prior to the Effective Time, UCT
shall take or cause to be taken all necessary actions to ensure that following
the Effective Time no participant in any such plan, program or arrangement shall
have any right thereunder to acquire any equity securities of UCT or the
Surviving Corporation or any subsidiary thereof.
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3.4 No Fractional Securities. No certificates or scrip representing
fractional VFNX Shares shall be issued upon the surrender for exchange of
certificates representing Shares pursuant to this Article III and no dividend,
stock split-up, or other change in the capital structure of VFNX shall relate to
any fractional security, and such fractional interests shall not entitle the
owner thereof to vote or to any rights of a security holder. In lieu of any such
fractional securities, each holder of Shares who would otherwise have been
entitled to a fraction of an VFNX Share upon surrender of stock certificates for
exchange pursuant to this Article III shall be paid cash upon such surrender in
an amount equal to the product of such fraction multiplied by the average
closing price for an VFNX Share on the OTC Bulletin Board for the five (5)
trading days immediately prior to the Closing Date (as defined below).
3.5 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Atlas Xxxxxxxx,
P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 at
9:00 a.m.local time, on the first business day (the "Closing Date") after the
later of (a) October 8th, 2001 or (b) the day on which all of the conditions set
forth in Article VIII hereof are satisfied or waived, or (c) at such other date,
time and place as the Companies shall agree.
3.6 Supplementary Action. If at any time after the Effective Time, any
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of any Company, or otherwise to
carry out the provisions of this Agreement, the officers and directors of the
Surviving Corporation are hereby authorized and empowered on behalf of the
Companies, in the name of and on behalf of any Company as appropriate, to
execute and deliver any and all things necessary or proper to vest or to perfect
or confirm title to such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this Agreement.
Article IV
REPRESENTATIONS AND WARRANTIES OF UCT
As used in this Agreement, (i) the term "Material Adverse Effect"
means, with respect to VFNX or UCT, as the case may be, a material adverse
effect on the business, assets, prospects, results of operations, or financial
condition of such party and its subsidiaries (in the case of VFNX, including
Acquisition Sub) taken as a whole or in the ability of such party to perform its
obligations hereunder, and (ii) the word "subsidiary" when used with respect to
any party means any corporation or other organization, whether incorporated or
unincorporated, of which such party or any other subsidiary of such party is a
general partner (excluding partnerships the general partnership interests of
which held by such party or any subsidiary of such party do not have a majority
of the voting interests in such partnership) or of which at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporations or other organizations is directly
or indirectly owned or controlled by such party and/or by any one or more of the
subsidiaries.
UCT and Korbin, jointly and severally, represent and warrant, with
respect to UCT and its subsidiaries and Korbin, except as disclosed in the UCT
Schedule of Exceptions (the "UCT Schedule") attached hereto as follows:
4.1 Organization. Each of UCT and its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the corporate power to carry
on its business as it is now being conducted and is duly qualified to do
business, and is in good standing in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so duly organized,
validly existing and in good standing, to have such corporate power, or to be so
qualified shall not have a Material Adverse Effect.
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4.2 Capitalization. As of the date hereof, the authorized capital stock
of UCT is as set forth in Schedule 4.2 hereto. As of the date hereof, the number
of Shares of UCT, which are issued and outstanding, is as set forth in Schedule
4.2 hereto. All of the issued and outstanding Shares UCT are validly issued,
fully paid, and non-assessable and free of preemptive rights or similar rights
created by statute, the Articles of Incorporation or Bylaws of UCT or any
agreement by which UCT or any of its subsidiaries is a party or by which it is
bound. Except (a) as set forth above or, (b) as disclosed in Schedule 4.2
hereto, there are not as of the date of this Agreement any shares of capital
stock of UCT issued or outstanding or any options, warrants, subscriptions,
calls, rights, convertible securities, or other agreements or commitments
obligating UCT to issue, transfer, or sell any shares of its capital stock. As
of the date hereof, no bonds, debentures, notes, or other indebtedness having
the right to vote (or convertible into or exercisable for securities having the
right to vote) on any matters on which shareholders of UCT may vote ("Voting
Debt") were issued and outstanding with respect to UCT.
4.3 Authority Relative to this Agreement. UCT has the corporate power
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by UCT and the consummation by UCT of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of UCT and the majority shareholders of UCT, and no other corporate
proceedings on the part of UCT are necessary to approve this Agreement or the
transactions contemplated hereby. Each shareholder of UCT is an "accredited
investor" as defined in the Securities Act of 1933. Korbin has the power and
authority to enter into this Agreement and perform his obligations hereunder.
4.4 Consents and Approvals; No Violations. Except for filing and
recordation of Articles of Merger under the FBCA no filing with, and no permit,
authorization, consent, or approval of, any public body or authority is
necessary for the consummation by UCT of the transactions contemplated by this
Agreement. Neither the execution and delivery of this Agreement by UCT, nor the
consummation by UCT of the transactions contemplated hereby, nor compliance by
UCT with any of the provisions hereof, shall (a) result in any breach of the
Articles of Incorporation or Bylaws of UCT, (b) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any fight of termination, cancellation, or
acceleration) under, any of the terms, conditions, or provisions of any note,
bond, mortgage, indenture, license, contract, agreement, or other instrument or
obligation to which UCT or any of its subsidiaries is a party or by which any of
them or any of their properties or assets may be bound or (c) violate any order,
writ, injunction, decree, statute, rule, or regulation applicable to UCT, any of
its subsidiaries or any of their properties or assets, except in the case of
clauses (b) and (c) for violations, breaches, or defaults that would not have a
Material Adverse Effect. The execution and delivery of this Agreement by Korbin
does not violate or result in a breach of any agreement to which Xxxxxx is a
party.
4.5 Reports and Financial Statements. Each of the balance sheets
(including the related notes) included in the unaudited financial statements for
the period ended June 30, 2001 fairly presents in all material respects the
consolidated financial position of UCT and its subsidiaries as of the respective
dates thereof, and the other related statements (including the related notes)
included therein fairly present in all material respects the results of
operations and cash flows of UCT and its subsidiaries for the respective periods
or as of the respective dates set forth therein, all in conformity with
generally accepted accounting principles consistently applied during the periods
involved, except as otherwise noted therein and subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments and any
other adjustments described therein and the absence of any notes thereto. UCT
represents that its books and records have been properly maintained and are
capable of being audited in accordance with Securities and Exchange Commission
rules without undue time and expenses.
4.6 Absence of Certain Changes or Events. Since June 30, 2001, neither
UCT nor any of its subsidiaries has: (a) taken any of the actions set forth in
Sections 6.1(b), 6.1(c), or 6.1(e) hereof; (b) incurred any liability material
to UCT and its subsidiaries on a consolidated basis, except in the ordinary
course of its business, consistent with past practices; (c) suffered a change,
or any event involving a prospective change, in the business, assets, financial
condition, or results of operations of UCT or any of its subsidiaries which has
had, or is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, or (d) subsequent to the date hereof, except as
permitted by Section 6.1 hereof, conducted its business and operations other
than in the ordinary course of business and consistent with past practices.
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4.7 Litigation. Except as provided for in Schedule 4.7, as of the date
of this Agreement: (i) there is no action, suit, judicial, or administrative
proceeding, arbitration or investigation pending or, to the best knowledge of
UCT, threatened against or involving UCT or any of its subsidiaries, or any of
their properties or rights, before any court, arbitrator, or administrative or
governmental body; (ii) there is no judgment, decree, injunction, rule, or order
of any court, governmental department, commission, agency, instrumentality, or
arbitrator outstanding against UCT or any of its subsidiaries; and (iii) UCT and
its subsidiaries are not in violation of any term of any judgments, decrees,
injunctions, or orders outstanding against them.
4.8 Contracts.
(a) Each of the material contracts, instruments, mortgages,
notes, security agreements, leases, agreements, or understandings, whether
written or oral, to which UCT or any of its subsidiaries is a party that relates
to or affects the assets or operations of UCT or any of its subsidiaries or to
which UCT or any of its subsidiaries or their respective assets or operations
may be bound or subject is a valid and binding obligation of UCT and in full
force and effect with respect to UCT. Except to the extent that the consummation
of the transactions contemplated by this Agreement may require the consent of
third parties, as disclosed in writing to the other Companies pursuant hereto,
there are no existing defaults by UCT or any of its subsidiaries thereunder or,
to the knowledge of UCT, by any other party thereto, which defaults,
individually or in the aggregate, would have a Material Adverse Effect; and no
event of default has occurred, and no event, condition, or occurrence exists,
that (whether with or without notice, lapse of time, or the happening or
occurrence of any other event) would constitute a default by UCT or any of its
subsidiaries thereunder which default would, individually or in the aggregate,
have a Material Adverse Effect.
(b) Except as set forth in the Schedule 4.8(b) as of the date
of this Agreement neither UCT nor any of its subsidiaries is a party to any oral
or written (i) agreement or contract not terminable on 30 days' or less notice
involving the payment of more than $25,000 per annum; (ii) joint venture
agreement; (iii) noncompetition or similar agreements that restricts UCT or its
subsidiaries from engaging in a line of business; (iv) agreement with any
officer or other employee of UCT or any subsidiary the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction involving UCT of the nature contemplated by this Agreement and
which provides for the payment of in excess of $10,000; (v) agreement with
respect to any executive officer of UCT or any subsidiary providing any term of
employment beyond one year or compensation guaranty in excess of $50,000 per
annum; or (vi) agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan, or stock purchase plan, any of
the benefits of which shall be increased, or the vesting of the benefits of
which shall be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
shall be calculated on the basis of any of the transactions contemplated by this
Agreement.
4.9 Employee Benefit Plans.
(a) Disclosed in Schedule 4.9 is a true and complete list of
each written or formal employee benefit plan (including, without limitation, any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) policy or agreement that is
maintained (all of the foregoing, the "Benefit Plans").
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4.10 Taxes. For the purposes of this section, the term "tax" shall
include all taxes, charges, withholdings, fees, levies, penalties, additions,
interest, or other assessments imposed by any United States federal, state, or
local authority or any other taxing authority on UCT as to its respective
income, profit, franchise, gross receipts, payroll, sales, employment, worker's
compensation, use, property, withholding, excise, occupancy, environmental, and
other taxes, duties, or assessments of any nature, whatsoever. UCT has filed or
caused to be filed timely all material federal, state, local, and foreign tax
returns required to be filed. Such returns, reports, and other information are
accurate and complete in all material respects. UCT has paid or caused to be
paid or has made adequate provision or set up an adequate accrual or reserve for
the payment of, all taxes shown to be due in respect of the periods for which
returns are due, and has established (or shall establish at least quarterly) an
adequate accrual or reserve for the payment of all taxes payable in respect of
the period subsequent to the last of said periods required to be so accrued or
reserved. UCT has no liability for taxes in excess of the amount so paid or
accruals or reserves so established. UCT is not delinquent in the payment of any
tax in excess of the amount reserved or provided therefor, and no deficiencies
for any tax, assessment, or governmental charge in excess of the amount reserved
or provided therefor have been threatened, claimed, proposed, or assessed. No
waiver or extension of time to assess any taxes has been given or requested.
UCT's federal and state income tax returns have never been audited by the
Internal Revenue Service or comparable state agencies.
4.11 Compliance With Applicable Law. UCT and each of its subsidiaries
holds all licenses, franchises, permits, variances, exemptions, orders,
approvals, and authorizations necessary for the lawful conduct of its business
under and pursuant to, and the business of each of UCT and its subsidiaries is
not being conducted in violation of, any provision of any federal, state, local,
or foreign statute, law, ordinance, rule, regulation, judgment, decree, order,
concession, grant, franchise, permit or license, or other governmental
authorization or approval applicable to UCT or any of its subsidiaries, except
to the extent that the failure to hold any such licenses, franchises, permits,
or authorizations, or any such violation, would not, individually or in the
aggregate, have a Material Adverse Effect.
4.12 Subsidiaries. There are no subsidiaries.
4.13 Labor and Employment Matters. (a) UCT and its subsidiaries are and
have been in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms, and conditions of
employment and wages and hours, and such laws respecting employment
discrimination, equal opportunity, affirmative action, worker's compensation,
occupational safety, and health requirements and unemployment insurance and
related matters, and are not engaged in and have not engaged in any unfair labor
practice; (b) to the knowledge of UCT, no investigation or review by or before
any governmental entity concerning any violations of any such applicable laws is
pending nor, to the knowledge of UCT is any such investigation threatened and no
governmental entity has provided any notice to UCT or any of its subsidiaries or
otherwise asserted an intention to conduct any such investigation; (c) in the
event of termination of the employment of any of the current officers,
directors, employees, or agents of UCT or any of its subsidiaries, neither UCT,
any of its subsidiaries, any other Company, the Surviving Corporation, VFNX nor
any other subsidiaries of UCT, shall pursuant to any agreement or by reason of
anything done prior to the Effective Time by UCT or any of its subsidiaries be
liable to any of said officers, directors, employees, or agents for so-called
"severance pay" or any other similar payments or benefits, including, without
limitation, post-employment healthcare (other than pursuant to COBRA) or
insurance benefits.
4.14 Intellectual Property.
(a) Except to the extent that the inaccuracy of any of the
following (or the circumstances giving rise to such inaccuracy) could not
reasonably be expected to have a Material Adverse Effect:
(i) UCT and its subsidiaries owns, or is licensed or
otherwise has the legally enforceable right to use (in each case, clear of any
liens or encumbrances of any kind), all Intellectual Property (as hereinafter
defined) used in or necessary for the conduct of its business as currently
conducted;
(ii) no claims are pending or, to the best knowledge
of each Company, threatened that UCT or any of its subsidiaries is infringing on
or otherwise violating the rights of any person with regard to any Intellectual
Property used by, owned by, and/or licensed to UCT or any of its subsidiaries
and, to the best knowledge of UCT, there are no valid grounds for any such
claims;
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(iii) to the best knowledge of each Company, no
person is infringing on or otherwise violating any right of UCT or any of its
subsidiaries with respect to any Intellectual Property owned by and/or licensed
to UCT or any of its subsidiaries;
(iv) to the best knowledge of each Company, there are
no valid grounds for any claim challenging the ownership or validity of any
Intellectual Property owned by UCT or any of its subsidiaries or challenging
UCT's or any of its subsidiaries' license or legally enforceable right to use
any Intellectual Property licensed by it; and
(v) to the best knowledge of each Company, all
patents, registered trademarks, service marks, and copyrights held by UCT and
each of its subsidiaries are valid and subsisting.
For purposes of this Agreement, "Intellectual Property" means
trademarks (registered or unregistered), service marks, brand names,
certification marks, domain names, trade dress, assumed names, trade names, and
other indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable, or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code,
and data); licenses, immunities, covenants not to xxx, and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing. Schedule 4.14(b)
is a list of all Intellectual Property of UCT.
4.15 Contents. None of the representations and warranties of UCT herein
contains any untrue statement of a material fact or omits to state a material
fact required to be stated herein or necessary to make the statements herein, in
light of the circumstances under which they were made not misleading.
Article V
REPRESENTATIONS AND WARRANTIES OF VFNX
VFNX represents and warrants with respect to itself and its
subsidiaries, except as disclosed to UCT in the VFNX Schedule of Exceptions (the
"VFNX Schedule"), attached hereto and incorporated herein by this reference, as
follows:
5.1 Organization. VFNX is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power to carry on its business as it is now
being conducted or presently proposed to be conducted. Each of VFNX and its
subsidiaries is duly qualified as a foreign corporation to do business, and is
in good standing (to the extent the concept of good standing exists), in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure to be so qualified shall not have a Material Adverse Effect.
5.2 Capitalization As of the date hereof, the authorized capital stock
of VFNX and each of its subsidiaries is as set forth in Schedule 5.2 of the VFNX
Schedule. As of the date hereof, the number of VFNX Shares which are issued and
outstanding is as set forth in Schedule 5.2 of the VFNX Schedule. All of the
issued and outstanding VFNX Shares are validly issued, fully paid, and
non-assessable and free of preemptive rights or similar rights created by
statute, the Articles of Incorporation or Bylaws of VFNX or any agreement by
which VFNX or any of its subsidiaries is a part or by which it is bound. Except
(a) as set forth above or, (b) as disclosed in Schedule 5.2 of the VFNX
Schedule, there are not as of the date of this Agreement any shares of capital
stock of VFNX issued or outstanding or any options, warrants, subscriptions,
calls, rights, convertible securities, or other agreements or commitments
obligating VFNX to issue, transfer, or sell any shares of its capital stock. As
of the date hereof, Voting Debt of VFNX were issued and outstanding
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5.3 Authority Relative to this Agreement. VFNX has the corporate power
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by VFNX and the consummation by VFNX of
the transactions contemplated hereby have been duly authorized by its Board of
Directors and no other corporate proceedings on the part of VFNX are necessary
to approve this Agreement or the transactions contemplated hereby.
5.4 No Violations. Neither the execution and delivery of this Agreement
by VFNX, nor the consummation by it of the transactions contemplated hereby, nor
compliance by VFNX with any of the provisions hereof, shall (a) results in any
breach of the Articles of Incorporation or Bylaws of VFNX, (b) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any fight of termination, cancellation,
or acceleration) under, any of the terms, conditions, or provision of any note,
bond, mortgage, indenture, license, contract, agreement, or other instrument or
obligation to which VFNX or any of its subsidiaries is a party or by which any
of them or any of their properties or assets may be bound or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to VFNX,
any of its subsidiaries or any of their properties or assets, except in the case
of clauses (b) and (c) for violations, breaches, or defaults that would not have
a Material Adverse Effect.
Article VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 Conduct of Business Pending the Merger. UCT agrees on its own
behalf and on behalf of its subsidiaries that, during the period from the date
of this Agreement and continuing until the Effective Time:
(a) The business of UCT and its subsidiaries shall be
conducted only in the ordinary and usual course of business and consistent with
past practices;
(b) UCT and its subsidiaries shall not, except as set forth on
Schedule 6.1(c) (i) sell or pledge or agree to sell or pledge any stock owned by
it in any of its subsidiaries; (ii) amend its Articles of Incorporation or
Bylaws; or (iii) split, combine, or reclassify any shares of its outstanding
capital stock or declare, set aside, or pay any dividend or other distribution
payable in cash, stock, or property in respect of its capital stock, or directly
or indirectly redeem, purchase, or otherwise acquire any shares of its capital
stock or other securities or shares of the capital stock or other securities of
any of its subsidiaries;
(c) UCT and its subsidiaries shall not (i) authorize for
issuance, issue, sell, pledge, dispose of, encumber, deliver, or agree or commit
to issue, sell, pledge, or deliver any additional shares of, or rights of any
kind to acquire any shares of, its capital stock of any class or exchangeable
into shares of stock of any class or any Voting Debt (whether through the
issuance or granting of options, warrants, commitments, subscriptions, rights to
purchase, or otherwise), (ii) acquire, dispose of, transfer, lease, license,
mortgage, pledge, or encumber any fixed or other substantial assets other than
in the ordinary course of business and consistent with past practices; (iii)
incur, assume, or prepay any material indebtedness, liability, or obligation or
any other material liabilities or issue any debt securities other than in the
ordinary course of business and consistent with past practices; (iv) assume,
guarantee, endorse, or otherwise become liable or responsible (whether directly,
contingently, or otherwise) for the obligations any other person (other than a
subsidiary) in a material amount other than in the ordinary course of business
and consistent with past practices; (v) make any material loans, advances, or
capital contributions to, or investments in, any other person, other than to
subsidiaries, other than in the ordinary course of business and consistent with
past practices; (vi) fail to maintain adequate insurance consistent with past
practices for their businesses and properties; or (vii) enter into any contract,
agreement, commitment, or arrangement with respect to any of the foregoing.
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(d) UCT shall use its best efforts to preserve intact the
business organization of Company and its subsidiaries, to keep available the
services of its and their present officers and key employees, and to preserve
the goodwill of those having business relationships with it and their respective
subsidiaries;
(e) UCT and its subsidiaries shall use all reasonable efforts
to prevent any representation or warranty of such Company herein from becoming
untrue or incorrect in any material respect.
6.2 Legal Conditions to Merger. UCT shall, and shall cause its
subsidiaries to, use all reasonable efforts (a) to take, or cause to be taken,
all actions necessary to comply promptly with all legal requirements which may
be imposed on such party or its subsidiaries with respect to the Merger and to
consummate the transactions contemplated by this Agreement, and (b) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any governmental entity and/or any
other public or private third party which is required to be obtained or made by
such party or any of its subsidiaries in connection with the Merger and the
transactions contemplated by this Agreement. Each Company shall promptly
cooperate with and furnish information to the other in connection with any such
burden suffered by, or requirement imposed upon, any of them or any of their
subsidiaries in connection with the foregoing.
Article VII
ADDITIONAL AGREEMENTS
7.1 Access and Information.
(a) UCT and its subsidiaries shall each afford to VFNX and to
its financial advisors, legal counsel, accountants, consultants, and other
representatives access during normal business hours throughout the period from
the date hereof to the Effective Time to all of its books, records, properties,
facilities, personnel commitments, and records (including but not limited to Tax
Returns) and, during such period, UCT shall furnish promptly to the other all
information concerning its business, properties, and personnel as VFNX may
reasonably request.
7.2 Acquisition Proposals. UCT shall not, and shall use its best
efforts to cause its directors, officers, employees, financial advisors, legal
counsel, accountants, and other agents and representatives (for purposes of this
Section 7.2 only, being referred to as "affiliates") not to, initiate, solicit,
or encourage, directly or indirectly, or take any other action to facilitate any
inquiries or the making of any proposal engage or participate in negotiations
concerning, provide any nonpublic information or data to, or have any
discussions with any person other than a party hereto or their affiliates
relating to, any acquisition, exchange offer, merger, consolidation, acquisition
of beneficial ownership of or the right to vote securities representing 10% or
more of the total voting power of UCT or any of its subsidiaries, dissolution,
business combination, purchase of all or any significant portion of the assets
or any division of, or any equity interest in, UCT or any subsidiary, or similar
transaction other than the Merger (such proposals, announcements, or
transactions being referred to as "Acquisition Proposals"). UCT shall promptly
notify the others orally and in writing if any such Acquisition Proposal
(including the terms thereof and identity of the persons making such proposals)
is received and furnish to the other parties hereto a copy of any written
proposal.
7.3 Public Announcements. So long as this Agreement is in effect, each
Company agrees that it shall obtain the approval of the other party prior to
issuing any press release and shall use its best efforts to consult with the
others before otherwise making any public statement or responding to any press
inquiry with respect to this Agreement or the transactions contemplated hereby,
except as may be required by law or any governmental agency.
9
7.4 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby shall be paid by the party incurring such
expenses.
7.5 Additional Agreements.
(a) Subject to the terms and conditions herein provided, each
of the parties hereto agrees to use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper, or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement, including using
all reasonable efforts to obtain all necessary waivers, consents, and approvals,
and to effect all necessary registrations and filings. In case at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of the
Companies shall take all such necessary action.
(b) Subject to the terms and conditions herein provided, each
Company shall cooperate with the others and use all reasonable efforts to
prepare all necessary documentation to effect promptly all necessary filings and
to obtain all necessary permits, consents, approvals, orders, and authorizations
of or any exemptions by, all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement.
7.6 Survival of Representations and Warranties. The respective
representations and warranties of UCT and Korbin contained in this Agreement
shall survive the Closing Date for a period of two years (the "Survival
Period"), at the end of which Survival Period no claim may be made with respect
to any such representation or warrant unless such claim shall have been asserted
in writing to the Indemnifying party during such period, except for the
representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.9, 4.10
and 4.11, which in each case, shall survive indefinitely.
7.7 Indemnification
(a) VFNX hereby agrees to indemnify and hold UCT, and its
officers, directors, affiliates, representatives, trustees, grantors,
beneficiaries and agents, and any successors thereto (the VFNX Indemnitees"),
harmless from any and all damages, losses, costs or reasonable expenses
(including, without limitation, reasonable fees and expenses of investigation
and reasonable attorneys' and consultants' fees and expenses in connection with
any action suit, or proceeding) (collectively, "Damages") incurred of suffered
as a result of or arising out of: (i) the breach of any representation or
warranty made by or on behalf of VFNX pursuant to Article V of this Agreement or
any other certificate or document delivered by VFNX pursuant to this Agreement,
and (ii) the breach of any covenants or agreement made or to be performed by
VFNX pursuant to this Agreement.
(b) UCT and Korbin, jointly and severally, hereby agree to
indemnify and hold VFNX, the Surviving Corporation and their officers,
directors, affiliates, representatives, trustees, grantors, beneficiaries and
agents, and any successors thereto (the VFNX Indemnitees") harmless from Damages
incurred or suffered as a result of or arising out of (i) the breach of any
representation or warranty made by UCT pursuant to Article VII of this Agreement
or any other certificate or document delivered by UCT pursuant to this
Agreement; (ii) the breach of any covenant or agreement made or to be performed
by UCT pursuant to this Agreement; or (iii) any potential litigation as
disclosed on Schedule 4.7 herein.
(c) Any party seeking indemnification (the "Indemnified
Party") from any other party (the "Indemnifying Party") with respect to any
claim, demand, action, proceeding or other matter (the "Claim") pursuant to this
Section 7.7 shall promptly notify the Indemnifying Party in writing of the
existence of the Claim, setting forth in reasonable detail the facts and
circumstances pertaining thereto and the basis for the Indemnified Party's right
to indemnification.
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(d) In the event that any third party notifies any Indemnified
Party with respect to any matter which may give rise to a Claim for
indemnification against the Indemnifying Party under this Agreement, then the
Indemnified party shall promptly notify the Indemnifying Party of such Claim;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from any
liability or obligation hereunder unless (and then solely to the extent) the
Indemnifying Party is prejudiced by such failure to give notice. The
Indemnifying Party, upon waiver of its right to contest the liability for which
indemnification is being sought and demonstration by the Indemnifying party of
its financial ability to satisfy any resulting judgement to the reasonable
satisfaction of the Indemnified Party, shall have the right to assume defense of
the Claim if notice is given to the Indemnified Party within ten (10) days after
receipt of notice of such Claim. If the Indemnifying Party assumes defenses of
the Claim as provided in the preceding sentence, then:
(i) The Indemnifying Party will diligently defend the
Indemnified Party against the matter with counsel of its choice reasonably
satisfactory to the Indemnified Party;
(ii) The Indemnified Party may retain separate
co-counsel at its sole cost and expense (except that the Indemnifying Party will
be responsible for the fees and expenses of the separate co-counsel (a) to the
extent the Indemnified Party concludes reasonably based upon advice of counsel
that a conflict of interest exists between the Indemnified Party and
Indemnifying Party or (b) the named parties to any such action (including any
impleaded parties) include both such Indemnified Party and the Indemnified party
and such Indemnified Party shall have been advised by counsel that there may be
one or more legal defenses available to the Indemnified Party which are not
available to the Indemnifying Party, or available to the Indemnifying Party, but
the assertion of which would be adverse to the interest of the Indemnified
Party;
(iii) The Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the matter
without the written consent of the Indemnifying Party (not to be withheld or
delayed unreasonably; it being understood and agreed that failure to consent to
a judgment or settlement that provides for relief other than monetary damages or
does not provide an unconditional release of the Indemnifying Party from
liability shall not be deemed unreasonable); and
(iv) The Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement, without the written consent
of the Indemnifying Party (not to be withheld or delayed unreasonably; it being
understood and agreed that failure to consent to a judgment or settlement that
provides for relief other than monetary damages or does not provide an
unconditional release of the Indemnified Party from liability shall not be
deemed unreasonable).
(e) If no Indemnifying Party notifies the Indemnified Party
within ten (10) days after the Indemnified Party has given notice of the matter
that the Indemnifying Party is assuming the defense thereto, then the
Indemnified Party may defend against, or enter into any settlement with respect
to the matter in any manner it reasonably may deem appropriate, without
prejudice to any of its rights hereunder.
(f) The Indemnified Party shall be entitled to reimbursement
of reasonably expenses included in Damages with respect to any Claim(including,
without limitation, the cost of defense, preparation and investigation relating
to such Claim) as such expenses are incurred by the Indemnified Party; provided,
however, that the Indemnified Party shall undertake to repay any amounts arising
solely from the fault of such Indemnified Party.
(g) The rights and remedies of the VFNX Indemnitees under
Section 7.8 shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or knowledge of, any of
the VFNX Indemnitees or any of their respective representatives or agents.
(h) Basket and Limitation. Notwithstanding anything to the
contrary in the foregoing provisions of this Article VII, no party shall be
required to indemnify another party until the aggregate of any costs and Damages
arising under this Article VII reaches $100,000, at which point the Indemnifying
Party shall be liable for all such costs and Damages of the Indemnified Party up
to a maximum liability of $1,000,000.
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(i) Offset. Notwithstanding anything to the contrary
contained herein, in the event the costs or Damages from a claim pursuant to
Section 7.7(b) exceed $100,000, VFNX may offset any such excess costs or Damages
in the following order: First, from the VFNX Shares that were granted to Korbin
as part of this Agreement; and next, from amounts due Korbin (after December 31,
2001) under his Employment Agreement with the Surviving Corporation. For
purposes of this section, the Shares granted to Korbin shall be valued at the
average of the closing price of VFNX common stock for the three trading days
prior to the Effective Time of this Agreement.
Article VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
8.1 Conditions to All Companies' Obligation to Effect the Merger. The
respective obligations of all Companies to effect the transactions contemplated
herein shall be subject to the satisfaction at or prior to the Effective Time of
the following conditions, any one of which may be waived by a writing signed by
VFNX and UCT:
(a) No preliminary or permanent injunction or other order by
any federal, state, or foreign court of competent jurisdiction which prohibits
the consummation of any Merger shall have been issued and remain in effect.
(b) Other than the filing of Articles of Merger with the
Department of State for the State of Florida all authorizations, consents,
orders or approvals of, or declarations or filings with any governmental entity
(all of the foregoing, "Consents") which are necessary for the consummation of
the Merger, other than Consents the failure to obtain which would have no
Material Adverse Effect on the consummation of the Merger or on the Surviving
Corporation and its subsidiaries, taken as a whole, shall have been filed,
occurred, or been obtained (all such permits, approvals, filings, and consents
and the lapse of all such waiting periods being referred to as the "Requisite
Regulatory Approvals") and all such Requisite Regulatory Approvals shall be in
full force and effect. All state securities or blue sky permits and other
authorizations necessary to issue the VFNX Shares in exchange for the Shares and
to consummate the Merger shall have been received.
(c) The other Company shall have performed in all material
respects its obligations under this Agreement required to be performed by it at
or prior to the Effective Time and the representations and warranties of the
other Company contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as if made at and as of such
time, except as contemplated by this Agreement, and each Company shall have
received a certificate of the Chairman of the Board, the President, or an
Executive Vice President of the other Company as to the satisfaction of this
condition.
8.2 Conditions to Obligation of VFNX. The obligations of VFNX to carry
out the transactions contemplated by this Agreement are subject to the following
conditions:
(a) Korbin shall have entered into a three (3) year Employment
Agreement with VFNX in the form satisfactory to VFNX.
(b) UCT shall provide a Closing Balance Sheet in the form
satisfactory to VFNX.
(c) There shall not have been any Material Adverse Effect on
UCT.
(d) VFNX shall have received such other agreements as VFNX and
its counsel may reasonably request.
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8.3 Conditions to Obligations of UCT. The obligations of UCT to carry
out the transactions contemplated by this Agreement are subject to the following
condition:
(a) VFNX shall have entered into a three (3) year Employment
Agreement with Korbin in the form satisfactory to UCT.
Article IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby abandoned at any time prior to the Effective Time, whether
before or after approval by the shareholders of UCT:
(a) By mutual written consent of all of the Companies.
(b) By either UCT or VFNX if the Merger shall not have been
consummated on or before October 31, 2001.
(c) By either UCT or VFNX if there shall have been any
material breach of a material obligation of another Company hereunder and, if
such breach is curable, such default shall have not been remedied within 10 days
after receipt by the other Company, as the case may be, of notice in writing
from such Company specifying such breach and requesting that it be remedied;
provided, that such 10-day period shall be extended for so long as the other
Company shall be making diligent attempts to cure such default.
(d) By either UCT or VFNX if any court of competent
jurisdiction in the United States or other United States governmental body shall
have issued an order, decree, or ruling or taken any other action restraining,
enjoining, or otherwise prohibiting the Merger and such order, decree, ruling,
or any other action shall have become final and non-appealable.
(e) Effect of Termination. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become of no further
effect and, except for a termination resulting from a breach by a party of this
Agreement, there shall be no liability or obligation on the part of any Company
or their respective officers or directors hereof and except for Sections 7.3,
7.4 and 9.1 hereof which shall survive the termination). Nothing contained in
this Section 9.1 shall relieve any party from liability for shallful breach of
this Agreement that results in termination of this Agreement. Upon request
therefor, each party shall redeliver all documents, work papers, and other
material of any other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party furnishing
same.
9.2 Amendment. This Agreement may be amended by action taken at any
time before or after approval hereof by the shareholders of UCT, but, after any
such approval, no amendment shall be made which alters the Exchange Ratio or
which in any way materially adversely affects the rights of such shareholders,
without the further approval of such shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
9.3 Waiver. At any time prior to the Effective Time, the parties hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Such waiver shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure.
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Article X
GENERAL PROVISIONS
10.1 Brokers. Each Company represents and warrants to the others that
no broker, finder, or financial advisor is entitled to any brokerage, finder's,
or other fee or commission in connection with the Merger or the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
any party hereto.
10.2 Post-Closing Covenant. As soon as practicable after the Effective
Time of this Agreement, VFNX shall use its reasonable best efforts to assume any
personal guaranties that Korbin is responsible for related to UCT.
10.3 Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telex or telecopy or mailed by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to VFNX, to:
VFNX, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: CEO
(b) If to UCT, to:
United Capturdyne Technologies, Inc.
0000 XX 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: CEO
(c) If to Korbin to:
Max Xxxxxxx Xxxxxx, XX
0000 XX 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: CEO
10.4 Descriptive Headings. The headings contained in this Agreement are
for reference Purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.5 Entire Agreement: Assignment. This Agreement (including the
Exhibits, Schedules, and other documents and instruments referred to herein) and
the Confidentiality Agreement (a) constitute the entire agreement and supersede
all other prior agreements and understandings, both written and oral, among the
parties or any of them, with respect to the subject matter hereof; and (b) shall
not be assigned by operation of law or otherwise.
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10.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida without giving effect to the
provisions thereof relating to conflicts of law.
10.7 Parties in Interest. Except for Sections 7.7 hereof, nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other person any rights, benefit, or remedies of any nature whatsoever or by
reason of this Agreement.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
10.9 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not effect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
10.10 Jurisdiction and Venue. Each Party hereto hereby agrees that any
proceeding relating to this Agreement and the Merger shall be brought in a state
court of Florida. Each party hereto hereby consents to personal jurisdiction in
any such action brought in any such Florida court, consents to service of
process by registered mail made upon such party and such party's agent and
waives any objection to venue in any such Florida court or to any claim that
such Florida court is an inconvenient form.
10.11 Investigation. The respective representations and warranties of
each Company contained herein or in the certificates or other documents
delivered prior to the Closing shall not be deemed waived or otherwise affected
by any investigation made by any party hereto.
10.12 Consents. For purposes of any provision of this Agreement
requiring, permitting, or providing for the consent of any or Company, the
written consent of the Chief Executive Officer of a Company shall be sufficient
to constitute such consent.
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IN WITNESS WHEREOF, each Company has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
VoiceFlash Networks, Inc., United Capturdyne Technologies, Inc.,
a Florida corporation a Florida corporation
By: By:
----------------------------- -----------------------------
Xxxxxxxx Xxxxx, CEO Max Xxxxxxx Xxxxxx, XX, CEO
VFNX, Inc., a Florida corporation
(Acquisition Sub)
By:
----------------------------- -----------------------------
Xxxxxxxx Xxxxx, President Max Xxxxxxx Xxxxxx, XX
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